Coming from a clerical family, Tor Andræ studied Theology at Uppsala University, where he completed his Ph.D. in 1917. He became professor of the History of Religions at the University College of Stockholm in 1927, and in Uppsala two years later. He was appointed bishop of Linköping in 1936 and was the same year briefly Minister for Ecclesiastical Affairs (an archaic title which in reality meant Minister of Education) in the short-lived cabinet of Axel Pehrsson-Bramstorp.

In 1985, Annemarie Schimmel remarked that until then only one study had "tried specifically to depict Muhammad's role in Islamic piety. Even today Tor Andrae's Die person Muhammeds in lehre und glaube seiner Gemeinde (1918) remains the standard work in this area, unsuperseded by any other major study, though complemented by random remarks in numerous modern work on Sufism. It is, however, unfortunately too little known even among Islamicists."[1]